After the sceptical public reaction which greeted the Hutton report, there were already fears the Butler probe would be discounted before it even started.
By Nick Assinder
BBC News Online political correspondent
Michael Howard's belated decision to turn his back on it has probably ensured it is now, if not a dead duck, then surviving only on life support.
Howard executed a u-turn over probe
It probably adds further pressure on the government to release Attorney General Lord Goldsmith's legal advice on the basis for the war.
By claiming that, after discussions with Lord Butler, he has concluded the inquiry has "unjustifiable restrictions" on its terms of reference, the Tory leader has pretty much whipped the rug from under it.
There will now be a lengthy bout of name calling as the Liberal Democrats, who refused to have anything to do with the inquiry from day one, sneer "told you so" and accuse Mr Howard of executing a farcical about-face.
And there is certainly a feeling in Westminster that the Tories may have missed a trick by originally agreeing to take part in the inquiry.
The fact that Tory MP Michael Mates may continue to sit on the inquiry anyway, but only in a personal capacity, adds to that impression.
At the time, Mr Howard insisted he had secured a deal that the investigation would be able to look at "the acts or omissions of individuals".
Kennedy refused to take part from day one
In other words, it would examine the actions of the prime minister and others in leading Britain to war.
Similarly, it appeared the Tories believed the inquiry would be able to examine the confidential advice from the attorney general on the legal basis for war.
Now, Mr Howard has decided none of that is likely so there is no point in taking part. Instead he will stand outside, ready and willing to criticise.
His decision may spark attacks from his political opponents, but far more significantly, it is a blow to anyone hoping the inquiry could provide the final word on the decision to go to war with Iraq.
Downing Street has insisted Lord Butler's probe will go ahead and is entirely independent.
But the prime minister must know that the likelihood is it will now carry little weight.
He is already under intense pressure to publish the attorney general's advice and that will only intensify.
Critics want wider inquiry into WMD
One way out would be to set up yet another inquiry, of the sort originally demanded by the likes of Liberal Democrat leader Charles Kennedy, into the entire issue of how Britain was taken into the war.
To satisfy the critics, however, it would have to be given wide and open-ended terms of reference, including the ability to see the legal advice.
And the prime minister's insistence that the Hutton Report has already dealt with individuals' actions would have to be put aside.
The prime minister almost certainly does not want that, particularly if it drags on to the general election.
But at the moment he is careering from one row over the war to another.
A wider inquiry may yet be the only option left to him if he wants to steer a path back towards domestic politics.